Banking Sector Exposure to Euro Peripherals

by the trader

The European Peripheral Problems have been painful, but some banks have actively been winding down the exposure. Stratfor reports;

Despite the recent Greek bailout by the International Monetary Fund and European Central Bank, investors remain wary of the possibility of contagion from Greece and the eurozone’s troubled periphery to the core economies of the region. While the eurozone’s strongest economies do have a significant exposure to Greece, Italy, Spain, Ireland and Portugal, their banking institutions have been actively working to divest from these holding since the beginning of the crisis. Germany has been particularly successful, reducing its exposure to fragile economies by more than 40 percent and making itself less vulnerable to a potential default from these countries. It is only recently that Berlin reversed its no-bailout policy regarding the European periphery, a move that contradicts the risk-minimizing and divesting behavior exhibited by its financial sector since the beginning of the eurozone crisis.

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